Q1 Snap: good result, valuation attractive
We calculate that 1Q18 was a 2-3% beat at the normalised EPS line. IS was slightly below our forecasts but WS and IM were ahead. Individual Annuities was stronger thanks to good gross inflows, higher account values and a strong RoA. The underwriting quality was good within the Workplace Solutions division. Lastly, the Investment Management division benefited from a couple of one-offs but the underlying business growth was healthy. PRU delivered a normalised ROE of ~13.5%, which we believe is largely sustainable, and we believe that the valuation is attractive with the stock trading on 1.0x FY19 BVPS.Prudential Financial is a holding company. Through its subsidiaries and affiliates, the company provides a range of financial products and services, including life insurance, annuities, retirement-related products and services, mutual funds and investment management. The company provides these products and services to individual and institutional customers. The company's principal operations are comprised of PGIM (its global investment management business), its United States Businesses (consisting of its United States Workplace Solutions, United States Individual Solutions, and Assurance IQ divisions), its International Businesses, the Closed Block division and its Corporate and Other operations.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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